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Other Climate Action Initiatives

Small Business Venture Capital Act

Equity Capital Budget Increased for Clean Technology

Effective 2008/09, the tax credit budget for the equity capital program is increased by $5 million annually with $7.5 million of the total budget allocated to clean technology businesses. With this change, the total tax credit budget for the Equity Capital Program rises to $30 million annually.

International Financial Activity Act

Intellectual Property Expanded to Include Green-Related Patents

Effective March 1, 2008, the list of eligible life-science related patents is expanded to include patents with classifications under the International Patent Classification System related to power generation using forces of nature such as wind, solar and tidal.

Social Service Tax Act

Tax Relief Provided for Certain Conventional Fuel Efficient Vehicles

Effective February 20, 2008, a point-of-sale tax reduction is provided for the purchase or lease of new conventional fuel efficient vehicles that meet the fuel efficiency criteria set out in the federal government’s ecoAUTO rebate program.

The tax reduction program is generally based on the federal program with the following differences:

  • hybrid vehicles and other alternative fuel vehicles eligible for existing partial provincial sales tax (PST) reductions to a maximum of $2,000 and $1,000 respectively will continue to receive that benefit;
  • flexible fuel vehicles are treated the same as conventional gasoline or diesel powered vehicles; and
  • unlike the federal program, there is no new levy imposed on fuel inefficient vehicles.

Otherwise, all vehicles eligible for a federal rebate will receive a point-of-sale PST reduction equal to the amount of the federal rebate. Table 3.5 shows fuel efficiency ratings required to qualify for a tax reduction, the amount of the tax reduction and 2008 model year vehicles that qualify.

Table 3.5.

The tax reduction for conventional fuel efficient vehicles, hybrid electric vehicles and all other alternative fuel vehicles will expire on March 31, 2011.

Exemption Provided for “ENERGY STAR Qualified” Refrigerators, Clothes Washers and Freezers

Effective February 20, 2008, an exemption is provided for residential refrigerators, clothes washers and freezers that are listed as being “ENERGY STAR Qualified” by the Office of Energy Efficiency, Natural Resources Canada.

To be listed as “ENERGY STAR Qualified” products must meet or exceed technical specifications to ensure they are among the most energy efficient in the marketplace. This exemption will expire on March 31, 2010.

Although the production of hydro electricity does not itself produce greenhouse gas emissions, conservation of electricity is essential to achieving provincial Energy Plan objectives to reduce and, in the future, eliminate the importation of electricity produced from less environmentally friendly sources such as coal.

Exemption Provided for Energy Efficient Residential Gas-Fired Water Heaters

Effective February 20, 2008, gas-fired water heaters with an energy factor of 0.80 or greater are exempt from PST when purchased for residential use. The energy factor is a measure of efficiency and is determined according to Canadian Standards Association standardized testing methods. A list of eligible gas-fired water heaters is available at the Ministry of Small Business and Revenue website. This exemption will expire on December 31, 2009.

Exemption Provided for Production Machinery and Equipment Used by Local Governments for Power Production and Cogeneration Purposes

Effective February 20, 2008, local governments, including local government corporations, may qualify for exemption from PST on purchases or leases of production machinery and equipment used primarily to generate electricity or in a cogeneration plant to generate electricity and heat for sale or own use. Eligible machinery and equipment includes turbines, generators, cogenerating reciprocating engines, heat exchangers, boilers and associated equipment necessary for their operation.

Relief Provided from Passenger Vehicle Rental Tax for Short-Term Rentals

Due to uncertainty about the applicability of passenger vehicle rental tax (PVRT) to car-sharing organizations and automotive service facilities, the legislation clarifies that PVRT does not apply to leases entered into before April 1, 2008. As of February 20, 2008, PVRT should not be charged on leases made between a membership-based car-sharing organization and a member of the organization or on leases between an automotive service facility and a person receiving services to a motor vehicle from the facility (i.e. courtesy cars). If members of a car-sharing organization or persons who leased a courtesy car paid PVRT on these leases, the members or persons may apply for a refund of tax paid prior to February 20, 2008.

Effective April 1, 2008, the $1.50 per day PVRT will not apply to passenger vehicles leased for a period of 8 consecutive hours or less. While this tax relief will benefit members of car sharing companies and vehicle co-operatives who lease vehicles by the hour for short periods, it also applies to passenger vehicles leased from all lessors, including rental companies and automotive service facilities that provide courtesy vehicles for their customers.

Bicycle Exemption Expanded to Include Electric Power-Assisted Two and Three Wheeled Cycles and Non-Motorized Tricycles

Effective February 20, 2008, the exemption from PST for non-motorized two wheeled bicycles is expanded to include electric power-assisted two and three wheeled cycles. To be eligible, electric power-assisted cycles must be equipped with pedals or hand cranks for propelling the cycle by muscular power. The exemption for power-assisted cycles will expire on March 31, 2011. The exemption is also broadened to include adult-sized non-motorized three wheeled tricycles.

Tax Reduction for Electric Motorcycles

Effective February 20, 2008, two-wheeled vehicles that are manufactured to operate exclusively on electricity are eligible for the alternative fuel vehicle tax reduction. Electric motorcycles and other two-wheeled electric vehicles are eligible for a tax reduction of 50 per cent, to a maximum of $1,000, provided certain eligibility criteria are met. The tax reduction will expire on March 31, 2011.

Exemption Provided for Insulation for Hot Water Tanks, Pipes and Ductwork

Effective February 20, 2008, a new exemption from PST is provided for the purchase of insulation designed to prevent heat loss from hot water tanks, hot and cold water pipes, and ductwork (e.g., insulation jackets for hot water heaters, foam insulation sleeves for hot water pipes). The exemption does not apply to tapes and sealants.

Tax Reduction for Hydrogen Fuel Cell Buses

Effective February 20, 2008, hydrogen fuel cell passenger buses are eligible for a 50 per cent reduction in the amount of tax payable on the purchase or lease of the bus to a maximum of $10,000. This parallels the tax reduction available to other alternative fuel passenger buses. The tax reduction will expire on March 31, 2011.

Exemption Provided for Biodiesel Fuel Used for Heating

Effective February 20, 2008, an exemption from PST is provided for biodiesel fuel, including the portion of biodiesel fuel used in a furnace oil blend, when used for heating or other non-motive purposes.

Exemption Provided for Certain Aerodynamic Devices Purchased for Use on Commercial Motor Vehicles

Effective February 20, 2008, the following devices are exempt from PST when purchased for the purpose of increasing the aerodynamics of a commercial tractor trailer:

  • tractor/trailer gap faring device;
  • tractor roof faring;
  • trailer side skirts; and
  • aerodynamic bumper and tank skirts.

These devices can significantly improve the fuel efficiency of commercial tractor-trailers. Labour charges to install exempt devices are also exempt.

Tax Imposed on Coal and Coke Except for Residential Use

Effective February 20, 2008, the exemption from PST for coal and coke is repealed except when purchased for use in a residential dwelling unit. This amendment removes a historical tax preference for coal and coke compared to other sources of energy such as natural gas, fuel oil and electricity when purchased for commercial use.

A one-year transitional refund is provided for purchases of coal or coke under fixed-price contracts entered into before February 20, 2008 where the contract cannot be adjusted to account for the tax.

Motor Fuel Tax Act

Alternative Motor Fuel (AMF) Classification for Biodiesel and Ethanol Expanded

Effective February 20, 2008, biodiesel and ethanol are classified as alternative motor fuels (AMFs) for all purposes. As such, biodiesel and ethanol used as coloured fuel, marine diesel, locomotive fuel, jet fuel or aviation fuel, including the portion used in a fuel blend, are exempt from tax. Previously biodiesel and ethanol were only exempt from tax when used in a motor vehicle on a highway.

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